What is expected return of the portfolio

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Reference no: EM131328131

Dalia’s Biomedical Supplies has a stock with a beta of 0.85 and an expected return of 10%. Assume that short-term US treasury bills are currently earning 3% and the market risk premium is 5%.

a) Assuming an equal investment in the two assets, what is expected return of the portfolio?

b) If the portfolio beta is 0.6, what are stock weights?

c) What is the required rate of return of this portfolio?

Reference no: EM131328131

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